An Australian government agency has revealed that women in senior leadership roles could be crucial to the country’s COVID-19 recovery.
Research released by the Bankwest Curtin Economics Centre (BCEC) and the Workplace Gender Equality Agency (WGEA) found that an increase in the share of female ‘top-tier’ managers by 10 percentage points or more led to a 6.6 per cent increase in the market value of Australian ASX-listed companies, worth the equivalent of $104.7 million.
The report, Gender Equity Insights 2020: Delivering on Business Outcomes, revealed a strong relationship between an increase in the number of women in key decision-making positions and improvements in company performance.
Report author and BCEC principal research fellow associate professor Rebecca Cassells said leadership has never been so important, especially when the world is dealing with the fallout and economic recovery from the COVID-19 pandemic.
“When businesses are looking to a post-COVID-19 world, our research shows that having a female CEO has the potential to help companies navigate through the crisis,” Cassells said.
The report found that in Australian ASX-listed companies, having a female CEO led to a five per cent increase in their market value. This is worth the equivalent of $79.6 million on average.
Cassells said that the new evidence is an important step towards delivering more gender equitable workplaces and understanding how they can improve the performance of Australian businesses.
“We found the appointment of a female CEO led to a five per cent increase in the market value of Australian ASX-listed companies. These companies also had a 12.9 per cent increase in the likelihood of outperforming the sector on three or more performance and profitability metrics,” Cassells said.
However, the report revealed some unsettling data about the current state of female representation in leadership roles, with only 14.1 per cent of board chairs being filled by women.
On top of this, only 17.1 per cent of CEOs are women and 29.8 per cent of companies have no female representation on their board and a similar proportion of companies have no women in their key management teams.
Not only are we seeing fewer women in leadership, but the research also showed the gender pay gap remains a concern for the Australian labour market.
The report uncovered that the gender pay gap has hovered between 14 per cent and 19 per cent for the past two decades.
“Although women are progressing faster into management and leadership roles, the data shows that systemic gender pay gaps persist, and are higher in senior leadership,” the report said.
“Measuring gender pay gaps is not enough—organisations should act on their pay equity outcomes to make a positive difference.
“Encouragingly, the 2018 report found that more than half of those organisations that conducted a pay gap analysis also took definitive action in light of the results. The most common type of action to take was to report to the executive, followed by reviewing performance pay.”
The report suggests companies concerned about narrowing the gender pay gap should work on increasing the representation of women in leadership roles as well as introducing flexible workplace policies such as employer-funded paid parental leave schemes and onsite childcare.
Featured image credit: iStock/LaylaBird